Ann: WAK Investor Presentation, page-11

Milsirhc

I'll restate the three points I had in my previous post first, then comment.

1. Estimated 12-month build, targeted outstanding funding to be completed via cashflow from operations.
2. Very strong demand from customers to accelerate Stage 2 timeline.
3. Stage 2 budget $16m, to date $4m has been spent.

Point 1 states “. . . completed via cashflow from operations.”

I presume that is what may happen.

The 12-month build is three months longer than what Managements said it took to build a plant some years ago. WAK may plan to start earlier than it needs to, and build slower. It may have added more circuitry to the second plant to handle K999 more efficiently. It may include further circuitry to effect a delamination add-on. Whatever the funding issue is, “2024 Stage 2” is vague enough for the plant to be operational by December 2024, and there is no screaming necessity to become operational earlier.

Point 2 states, ”Very strong demand from customers to accelerate Stage 2 timeline.”

An earlier increase in capacity would be nice, but not necessary for WAK. It is likely to be more urgent for European distributors to get product for their Asian customers, and therein lies a cornucopiae of win-win arrangements with a financing nexus. At the low-commitment end it would need be no more than a bankable off-take agreement that suffices find a lender at a reasonable interest rate.

I used to negotiate large contracts for a living, and the trick to cut good deals was to to give the other party something that costs nothing, but is worth a great deal to them. An assured supply of top-grade K99 product to deliver to Asian users in return for a piece of paper (an off-take agreement) should be achievable with European distributors of Imerys and Sibelcos ilk.

Point 3 states, “Stage 2 budget $16m, to date $4m has been spent.”

If that means WAK must spend $12m to get Stage 2 up and running, and it is going to take twelve months, then any funding shortfall should be modest – petty cash for the likes of Imerys and Sibelco. I just use those two names as proxies for an astute Company X that recognises a good thing.